That followed action late last month by Standard & Poor's, which put Kansas' AA rating on review for a possible downgrade after the state lowered its revenue estimates for the current and next fiscal year by $228.7 million.

Governor Sam Brownback plans to divert $185 million in sales tax revenue from the state' highway fund to the general fund and delay a $96.5 million fiscal 2016 pension payment to help fill the gap.

"By continuing to balance its budget with unsustainable, nonrecurring resources, including pension underfunding, it is accumulating large and expensive long-term liabilities that it will be paying off for a long time," Moody's said in a statement.

The credit rating agency also revised the outlook on $2.1 billion of Aa2-rated Kansas highway revenue bonds to negative from stable.

The Kansas budget is feeling the effects from action taken by Brownback and the Republican-controlled legislature in recent years to cut corporate and other income taxes to help the state compete with bordering Missouri and other states for business development and jobs.